How are RF butterfly max profit and max loss calculated?

Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the RF butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 26.50%), the computed maximum profit is $112.77 per contract and the computed maximum loss is -$77.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RF butterfly?

The breakeven for the RF butterfly priced on this page is roughly $25.78 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current RF market-implied 1-standard-deviation expected move is approximately 7.60%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current RF implied volatility affect this butterfly?

RF ATM IV is at 26.50% with IV rank near 24.25%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.

RF Butterfly Strategy

RF (Regions Financial Corporation), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities.

RF (Regions Financial Corporation) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $22.73B, a trailing P/E of 10.33, a beta of 1.03 versus the broader market, a 52-week range of 20.79-31.53, average daily share volume of 12.8M, a public-listing history dating back to 1980, approximately 20K full-time employees. These structural characteristics shape how RF stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.03 places RF roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 10.33 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. RF pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a butterfly on RF?

A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration.

Current RF snapshot

As of May 15, 2026, spot at $26.69, ATM IV 26.50%, IV rank 24.25%, expected move 7.60%. The butterfly on RF below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 34-day expiry.

Why this butterfly structure on RF specifically: RF IV at 26.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a RF butterfly, with a market-implied 1-standard-deviation move of approximately 7.60% (roughly $2.03 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RF expiries trade a higher absolute premium for lower per-day decay. Position sizing on RF should anchor to the underlying notional of $26.69 per share and to the trader's directional view on RF stock.

RF butterfly setup

The RF butterfly below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With RF near $26.69, the first option leg uses a $25.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RF chain at a 34-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 RF shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 1	Call	$25.00	$1.78
Sell 2	Call	$27.00	$0.65
Buy 1	Call	$28.00	$0.30

RF butterfly risk and reward

Net Premium / Debit: -$77.50
Max Profit (per contract): $112.77
Max Loss (per contract): -$77.50
Breakeven(s): $25.78
Risk / Reward Ratio: 1.455

Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit.

RF butterfly payoff curve

Modeled P&L at expiration across a range of underlying prices for the butterfly on RF. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$77.50
$5.91	-77.9%	-$77.50
$11.81	-55.7%	-$77.50
$17.71	-33.6%	-$77.50
$23.61	-11.5%	-$77.50
$29.51	+10.6%	+$22.50
$35.41	+32.7%	+$22.50
$41.31	+54.8%	+$22.50
$47.21	+76.9%	+$22.50
$53.11	+99.0%	+$22.50

When traders use butterfly on RF

Butterflies on RF are pinning bets - traders use them when they expect RF to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.

RF thesis for this butterfly

The market-implied 1-standard-deviation range for RF extends from approximately $24.66 on the downside to $28.72 on the upside. A RF long call butterfly is a pinning play: it pays maximum at the middle strike if RF settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current RF IV rank near 24.25% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on RF at 26.50%. As a Financial Services name, RF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RF-specific events.

RF butterfly positions are structurally neutral / pin (limited-risk, limited-reward); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. RF positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RF alongside the broader basket even when RF-specific fundamentals are unchanged. Always rebuild the position from current RF chain quotes before placing a trade.

Frequently asked questions

What is a butterfly on RF?: A butterfly on RF is the butterfly strategy applied to RF (stock). The strategy is structurally neutral / pin (limited-risk, limited-reward): A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration. With RF stock trading near $26.69, the strikes shown on this page are snapped to the nearest listed RF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are RF butterfly max profit and max loss calculated?: Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the RF butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 26.50%), the computed maximum profit is $112.77 per contract and the computed maximum loss is -$77.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a RF butterfly?: The breakeven for the RF butterfly priced on this page is roughly $25.78 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current RF market-implied 1-standard-deviation expected move is approximately 7.60%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a butterfly on RF?: Butterflies on RF are pinning bets - traders use them when they expect RF to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
How does current RF implied volatility affect this butterfly?: RF ATM IV is at 26.50% with IV rank near 24.25%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.